Reducing OTTO returns: what a return really costs your margin

On OTTO, a return costs you more than the return postage. The sale is gone, the outbound shipping you paid stays paid, returned goods cannot always be resold at full value, and the money moves a second time, weeks after the sale. The commission, by contrast, you get back from OTTO.

This guide separates the components of a return, works through them in an example and shows which lever achieves how much. It is written for sellers on OTTO Market, not for customers who want to send something back.

How a return works on OTTO Market

For the costs, it matters who triggers which step. According to OTTO, the process for parcel goods looks like this:

1. You ship and, with the shipping confirmation, transmit two tracking numbers: one for the outbound leg and a return tracking number for the way back.
2. The customer registers the return in their customer account within the 30-day return period and selects a return reason.
3. OTTO generates the return label from your return tracking number and the return address you have stored, and provides it as a PDF in the customer account.
4. The goods arrive at your warehouse. You inspect them and report the items, or the whole order, as returned.
5. OTTO refunds the customer the amount and offsets the return against your sales credit.

Returns to a warehouse in Germany are handled with Hermes, DHL or GLS, according to OTTO. For return warehouses in Austria, the Czech Republic, Denmark, France, Italy, the Netherlands, Poland and Spain, only DHL is permitted. For freight goods you do not need a return tracking number; instead, customers see the contact details you have stored and arrange the return with you.

Set the return status only after inspection. According to the OTTO onboarding guide (January 2024), it cannot be changed afterwards.

The components of a return

If you just write "return costs" on one line, you miss that some items come back and others do not. Looked at separately, they are:

1. Refund: the sale disappears

The customer gets the purchase price back, and your revenue from this sale is gone. Strictly speaking, this is not an additional expense, but the contribution margin the sale would have brought is lost. The share of delivered items that comes back is measured by the return rate.

2. Commission: OTTO refunds it

OTTO calculates the commission on the selling price and the shipping costs, each including VAT. On returns, according to the onboarding guide, OTTO refunds the commissions originally charged, via a credit note (invoice correction). A retained share as a processing fee is not provided for there. That is not the case on every marketplace: Amazon, for instance, keeps part of the referral fee on refunds, see returns in the Amazon fees guide. Check the refund in your credit note anyway.

3. Shipping: outbound, return and the customer-paid shipping share

• Outbound shipping: What you paid your carrier for the parcel to the customer stays paid. It is lost on every return.
• Return shipping: The return tracking number is free of charge, according to OTTO. Costs only arise for you when the label is actually used. How much depends on your terms with the carrier.
• Customer-paid shipping share: If you charge shipping, you receive it on a kept purchase, less 16% commission on it. According to the OTTO onboarding guide, shipping costs are refunded in full only when all items of an order come back. On a full return, the shipping share and the commission on it therefore both fall away. How partial returns and freight goods are refunded is described by OTTO in the Partner Helpdesk.

4. Goods: residual value rather than total loss

Returned goods are not automatically lost. If they are as new, you sell them again, and their purchase price is not a loss. Damaged, used or incomplete goods lose value. For the calculation, a residual value as a percentage of the purchase price helps: 100% for flawless returns, less for B-stock, 0% for goods you dispose of. The loss in value is then purchase price × (100% − residual value). On top of that comes the working time for inspecting, reconditioning and restocking.

5. Advertising and time

OTTO bills Sponsored Product Ads per click. The click costs for an order that later comes back have been incurred regardless. And the return does not appear together with the sale but weeks later in your statement. What that means for analysis and liquidity is covered below in the section on the time lag.

Worked example: 100 orders, 30 returns

The following example is invented and not a customer’s case. All costs and the 30% return rate are assumptions, not industry figures. Put in your own numbers. The assumption is a men’s shoe at EUR 79.95 gross (19% VAT); customers pay EUR 4.95 shipping. Each order contains one pair. You are entitled to deduct input VAT, so commission and costs count net.

One kept sale

One full return

If the pair comes back, OTTO refunds the customer the purchase price and shipping, and refunds you the commission. Revenue and commission are therefore at zero. What remains are these costs:

The month with 100 orders

Per kept pair, that leaves EUR 12.96 (EUR 907.20 ÷ 70) instead of EUR 19.56. Arithmetically, each kept pair carries EUR 6.60 of return costs (EUR 462.00 ÷ 70). The monthly base fee of EUR 99.90 is deliberately not in this item calculation. It belongs in the contribution margin of the period and is deducted there pro rata, as described in the guide to OTTO marketplace fees.

Measures in the example: which lever achieves how much

With the same assumptions, you can estimate what a measure achieves in a month. Each row changes exactly one assumption; everything else stays as above.

In the example, the rate has a stronger effect than the other levers: every return that becomes a kept purchase changes the result by EUR 34.96, that is the sale’s contribution margin plus the avoided return costs. The last row is not a saving lever; it shows the value of the shipping share: per kept pair, EUR 3.37 of it remains (EUR 4.16 net − EUR 0.79 commission). Whether free shipping brings more orders is not something this calculation shows.

Reduce the return rate per item

• Sort by item: An overall rate hides which items cause the returns. Compare each item’s rate with its maximum return rate from the example above.
• Analyse return reasons: Customers select a reason when registering the return. If size or description reasons pile up for one item, it is worth looking at the product data.
• Sharpen product data: Measurements rather than just size codes, notes on fit, material, weight and images that show the product from several angles.
• Avoid shipping errors: Wrong size, wrong colour or a damaged parcel trigger returns that have nothing to do with the product. In the example, each return costs EUR 15.40 plus the lost contribution margin; that is the yardstick for what a check before dispatch may cost.

Protect residual value

• Inspect before reporting the status: Document the condition on receipt before you confirm the return.
• Choose packaging that survives a return: If the goods come back undamaged in the shipping carton, they remain saleable.
• Define the reconditioning process: Deciding in advance on a clear route for new stock, B-stock and disposal prevents returns from sitting in the warehouse for a long time.

Return shipping and product range

• Compare terms: For returns to a warehouse in Germany, Hermes, DHL and GLS are permitted. According to OTTO, you can store several return warehouses and assign different carriers to them, provided your system supports it.
• Review items above the maximum return rate: Adjust the price, pause advertising for the item or remove it from your OTTO range. The calculation above shows the point at which it no longer contributes.

Time lag: when the return arrives in your result

On OTTO, sale and return fall in different weeks, often in different months. According to OTTO’s information, the money moves like this:

1. Sale: OTTO invoices you the commission weekly and offsets it against your sales credit.
2. Payout: Your credit is paid out weekly on Thursdays with a due date of 14 days. According to the onboarding guide, it takes around 14 to 20 days until payout.
3. Return: Customers have 30 days from delivery to register the return. Add the transit time, your inspection and the status report.
4. Refund and credit note: After your confirmation, OTTO refunds the customer the amount, and you get the commission back via a credit note. Both are offset against a later payout. If the charges exceed your credit, a direct debit may also occur, according to the onboarding guide.

For your analysis, this means: a sale may already have been paid out while its return is still in transit. This gives two views of the same month:

• By order date: Each return counts towards the month in which the order was placed. This shows you the actual rate and the contribution margin of a sales month. For the most recent weeks, though, the picture is still too good because returns are outstanding.
• By receipt of the return: Each return counts towards the month in which it was booked. This matches your account balance and payouts but mixes returns from earlier sales into the current month.

So evaluate an item only once the return period for its sales has expired and the registered returns have arrived at your warehouse, and plan liquidity by receipt. More on both views is in the glossary under return rate.

Return costs per item in profitkonsole

Doing the calculation above by hand for every item and every month takes time. profitkonsole imports your orders, returns, fees and shipping profiles via the OTTO API. You maintain purchase prices and shipping costs yourself; you configure order shipping and return shipping separately, and you store the residual value of returned goods per item.

From that, you see the returns per item together with lost revenue and return shipping costs, the return rate by items and by orders, and the contribution margin that remains after returns. profitkonsole takes over the SPA advertising costs daily and assigns them to the items. This is how you spot items where returns eat up the contribution.

Conclusion

• A return on OTTO consists of several items: the refund, lost outbound shipping, the return label, loss in value and working time.
• OTTO refunds you the commission. OTTO refunds the shipping share to the customer in full only on a full return; then you lose it together with the commission on it.
• In the example, a return costs EUR 15.40. Every return that becomes a kept purchase brings EUR 34.96. The maximum return rate there is around 56%.
• Returns arrive in your statement weeks after the sale. Evaluate items by order date, plan liquidity by receipt.

Read on: OTTO marketplace fees 2026 with all commissions and a worked example →

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Return rate, return shipping costs and residual value per item alongside commission and purchase price: that is how you see what is left after returns.

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